Did you record the loan amount anywhere? Was there a document that showed the expected payback and interest rate on the loan? If you have no real evidence of this money being a loan, then the IRS would classify it as a gift to your friend, and the stock given to you was also just a gift. As such, your cost basis in the stock would be the same as your friend's cost basis. You would need to discuss this with your friend to determine his cost basis in the stock, such as whether he claimed it in any way when he received it and what amount he used to claim it.
